Secondments - What & Why?
What is a secondment?
A secondment is an arrangement whereby an employee is temporarily assigned to work for another company or organisation. This may be a different employer within the group or a separate employer, such as a client or customer.
The idea behind a secondment is that the company ‘lends’ the secondee to the Host Company or Organisation but the company remains the employer throughout and the secondee’s continuity of employment is preserved.
What is the purpose of a secondment?
Employers may arrange a secondment in order to:
• provide temporary assistance to the Host Company or Organisation for it to cover, say, maternity leave or sickness absence;
• enable the secondee to gain experience in a specific area and/or insight into the work of the host;
• promote the career development of the secondee;
• enable the original employer to avoid redundancies;
• develop a business relationship between companies/organisations; or
• help the Host Company or Organisation to avoid incurring recruitment costs.
Who is the employer?
As stated above, the idea behind a secondment is that the original employer "lends" the secondee to the Host Company or Organisation, but the original employer remains the secondee’s employer throughout. This means that the secondee's continuity of employment with the original employer should be preserved and the secondee will, following the termination of the secondment, "return" to the original employer.
While the parties may not intend that the secondee becomes employed by the Host Company or Organisation, there is a risk that the secondee may (technically) become the host's employee, despite the parties' intentions. This depends on the facts of the particular case and could occur where the original employer surrenders control over the secondee to the Host Company or Organisation to such an extent that all mutual obligations between it and the secondee cease.
In order to avoid the risk of the seconded employee becoming an employee of the Host Company or Organisation, both parties should ensure that:
• the secondee does not owe any duties directly to the Host Company or Organisation but only to the secondee’s employer;
• That the secondee’s employer retains day-to-day control of the seconded employee; and
• That the secondee’s employer carries out any appraisals and disciplinary or grievance procedures.
Confidentiality and restrictive covenants
Both the secondee’s employer and the Host Company or Organisation will wish to protect any of their business secrets to which the secondee may have access.
The secondee’s employer should have sufficient protection as a result of existing restrictions and provisions in the secondee's contract of employment. However, employers may wish to stress the need for confidentiality during the secondment.
Finally, a secondment letter can give protection against the Host Company or Organisation either employing the secondee directly at the end of the secondment period or competing with the secondee’s employer as a result of information obtained during the secondment.
Simply-Docs has produced a Secondment Letter template which can be viewed here.